RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 4,
1997 (the "Agreement"), between Autoliv, Inc., a
Delaware corporation (the "Company"), and First
Chicago Trust Company of New York, a New York banking
corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on August 5, 1997 (the "Rights
Dividend Declaration Date"), the Board of Directors of
the Company authorized and declared a dividend
distribution of one Right (as hereinafter defined) for
each share of common stock, par value $1.00 per share,
of the Company (the "Common Stock") outstanding at the
close of business on November 6, 1997 (the "Record
Date"), and has authorized the issuance of one Right
(as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(p) hereof) for each
share of Common Stock of the Company issued between
the Record Date (whether originally issued or
delivered from the Company's treasury) and the
Distribution Date (as hereinafter defined) each Right
initially representing the right to purchase one one-
hundredth of a share of Series A Junior Participating
Preferred Stock of the Company (the "Preferred Stock")
having the rights, powers and preferences set forth in
the form of Certificate of Designation, Preferences
and Rights attached hereto as Exhibit A, upon the
terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth,
the parties hereby agree as follows:
Section 1. Certain Definitions. For
purposes of this Agreement, the following terms have
the meanings indicated:
(a) "Acquiring Person" shall mean any
Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial
Owner of 15% or more of the shares of Common Stock
then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company, or of any
Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for
or pursuant to the terms of any such plan, or (iv) any
Person who becomes the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding as a
result of a reduction in the number of shares of
Common Stock outstanding due to the repurchase of
shares of Common Stock by the Company unless and until
such Person, after becoming aware that such Person has
become the Beneficial Owner of 15% or more of the then
outstanding shares of Common Stock, acquires
beneficial ownership of additional shares of Common
Stock representing 1% or more of the shares of Common
Stock then outstanding, or (v) any such Person who has
reported or is required to report such ownership (but
less than 20%) on Schedule 13G under the Exchange Act
(or any comparable or successor report) or on Schedule
13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state
any intention to or reserve the right to control or
influence the management or policies of the Company or
engage in any of the actions specified in Item 4 of
such schedule (other than the disposition of the
Common Stock) and, within ten days of being requested
by the Company to advise it regarding the same,
certifies to the Company that such Person acquired
shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the
Rights and who, together with all Affiliates and
Associates, thereafter does not acquire additional
shares of Common Stock while the Beneficial Owner of
15% or more of the shares of Common Stock then
outstanding; provided, however, that if the Person
requested to so certify fails to do so within ten
days, then such Person shall become an Acquiring
Person immediately after such ten-day period.
(b) "Act" shall mean the Securities
Act of 1933, as amended.
(c) "Affiliate" and "Associate" shall
have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
(d) A Person shall be deemed the
"Beneficial Owner" of, and shall be deemed to
"beneficially own," any securities:
(i) which such Person or any
of such Person's Affiliates or Associates,
directly or indirectly, has the right to
acquire (whether such right is exercisable
immediately or only after the passage of
time) pursuant to any agreement, arrangement
or understanding (whether or not in writing)
or upon the exercise of conversion rights,
exchange rights, rights, warrants or
options, or otherwise; provided, however,
that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially
own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person
or any of such Person's Affiliates or
Associates until such tendered securities
are accepted for purchase or exchange, (B)
securities issuable upon exercise of Rights
at any time prior to the occurrence of a
Triggering Event (as hereinafter defined),
or (C) securities issuable upon exercise of
Rights from and after the occurrence of a
Triggering Event which Rights were acquired
by such Person or any of such Person's
Affiliates or Associates prior to the
Distribution Date (as hereinafter defined)
or pursuant to Section 3(a) or Section 22
hereof (the "Original Rights") or pursuant
to Section 11(i) hereof in connection with
an adjustment made with respect to any
Original Rights;
(ii) which such Person or
any of such Person's Affiliates or
Associates, directly or indirectly, has the
right to vote or dispose of or has
"beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange Act),
including pursuant to any agreement,
arrangement or understanding, whether or not
in writing; provided, however, that a Person
shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security
under this subparagraph (ii) as a result of
an agreement, arrangement or understanding
to vote such security if such agreement,
arrangement or understanding: (A) arises
solely from a revocable proxy given in
response to a public proxy or consent
solicitation made pursuant to, and in
accordance with, the applicable provisions
of the General Rules and Regulations under
the Exchange Act, and (B) is not reportable
by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially
owned, directly or indirectly, by any other
Person (or any Affiliate or Associate
thereof) with which such Person (or any of
such Person's Affiliates or Associates) has
any agreement, arrangement or understanding
(whether or not in writing), for the purpose
of acquiring, holding, voting (except
pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this
paragraph (d)) or disposing of any voting
securities of the Company; provided,
however, that nothing in this paragraph (d)
shall cause a Person engaged in business as
an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially
own," any securities acquired through such
Person's participation in good faith in a
firm commitment underwriting until the
expiration of forty days after the date of
such acquisition, and then only if such
securities continue to be owned by such
Person at such expiration of forty days.
(e) "Business Day" shall mean any day
other than a Saturday, Sunday or a day on which
banking institutions in the State of New York are
authorized or obligated by law or executive order to
close.
(f) "Close of business" on any given
date shall mean 5:00 P.M., New York City time, on such
date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the
common stock, par value $1.00 per share, of the
Company, except that "Common Stock" when used with
reference to any Person other than the Company shall
mean the capital stock of such Person with the
greatest voting power, or the equity securities or
other equity interest having power to control or
direct the management, of such Person.
(h) "Common Stock Equivalents" shall
have the meaning set forth in Section 11(a)(iii)
hereof.
(i) "Current Market Price" shall have
the meaning set forth in Section 11(d)(i) hereof.
(j) "Current Value" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(k) "Distribution Date" shall have the
meaning set forth in Section 3(a) hereof.
(l) "Equivalent Preferred Stock" shall
have the meaning set forth in Section 11(b) hereof.
(m) "Exchange Act" shall mean the
Securities and Exchange Act of 1934, as amended.
(n) "Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(o) "Final Expiration Date" shall have
the meaning set forth in Section 7(a) hereof.
(p) "Person" shall mean any
individual, firm, corporation, partnership or other
entity.
(q) "Preferred Stock" shall mean
shares of Series A Junior Participating Preferred
Stock, par value $1.00 per share, of the Company, and,
to the extent that there are not a sufficient number
of shares of Series A Junior Participating Preferred
Stock authorized to permit the full exercise of the
Rights, any other series of preferred stock of the
Company designated for such purpose containing terms
substantially similar to the terms of the Series A
Junior Participating Preferred Stock.
(r) "Principal Party" shall have the
meaning set forth in Section 13(b) hereof.
(s) "Purchase Price" shall have the
meaning set forth in Section 4(a) hereof.
(t) "Qualified Offer" shall have the
meaning set forth in Section 11(a)(ii) hereof.
(u) "Record Date" shall have the
meaning set forth in the WHEREAS clause at the
beginning of this Agreement.
(v) "Rights" shall have the meaning
set forth in the WHEREAS clause at the beginning of
this Agreement.
(w) "Rights Agent" shall have the
meaning set forth in the parties clause at the
beginning of this Agreement.
(x) "Rights Certificate" shall have
the meaning set forth in Section 3(a) hereof.
(aa) "Rights Dividend Declaration Date"
shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.
(bb) "Section 11(a)(ii) Event" shall
mean any event described in Section 11(a)(ii) hereof.
(cc) "Section 13 Event" shall mean any
event described in clauses (x), (y) or (z) of Section
13(a) hereof.
(dd) "Spread" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(ee) "Stock Acquisition Date" shall
mean the first date of public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to
Section 13(d) under the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has
become such other than pursuant to a Qualified Offer.
(ff) "Subsidiary" shall mean, with
reference to any Person, any corporation of which an
amount of voting securities sufficient to elect at
least a majority of the directors of such corporation
is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(gg) "Substitution Period" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(hh) "Summary of Rights" shall have the
meaning set forth in Section 3(b) hereof.
(ii) "Trading Day" shall have the
meaning set forth in Section 11(d)(i) hereof.
(jj) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as
agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior
to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time
appoint such co-rights agents as it may deem necessary
or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the close
of business on the tenth day after the Stock
Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the
close of business on the Record Date), or (ii) the
close of business on the tenth day (or such later date
as the Board shall determine) after the date that a
tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized,
appointed or established by the Company for or
pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under
the Exchange Act, if upon consummation thereof, such
Person would become an Acquiring Person, in either
instance other than pursuant to a Qualified Offer (the
earlier of (i) and (ii) being herein referred to as
the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b)
of this Section 3) by the certificates for the Common
Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights)
and not by separate certificates, and (y) the Rights
will be transferable only in connection with the
transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights
Agent will send by first-class, insured, postage-
prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the
records of the Company, one or more rights
certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject
to adjustment as provided herein. In the event that
an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights
Certificates.
(b) The Company will make available,
as promptly as practicable following the Record Date,
a copy of a Summary of Rights, in substantially the
form attached hereto as Exhibit C (the "Summary of
Rights") to any holder of Rights who may so request
from time to time prior to the Expiration Date. With
respect to certificates for the Common Stock
outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the
registered holders of the Common Stock shall also be
the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section
7(a) hereof), the transfer of any certificates
representing shares of Common Stock in respect of
which Rights have been issued shall also constitute
the transfer of the Rights associated with such shares
of Common Stock.
(c) Rights shall be issued in respect
of all shares of Common Stock which are issued
(whether originally issued or from the Company's
treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration
Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and
entitles the holder hereof to certain Rights
as set forth in the Rights Agreement between
Autoliv, Inc. (the "Company") and the Rights
Agent thereunder (the "Rights Agreement"),
the terms of which are hereby incorporated
herein by reference and a copy of which is
on file at the principal offices of the
Rights Agent. Under certain circumstances,
as set forth in the Rights Agreement, such
Rights will be evidenced by separate
certificates and will no longer be evidenced
by this certificate. The Rights Agent will
mail to the holder of this certificate a
copy of the Rights Agreement, as in effect
on the date of mailing, without charge,
promptly after receipt of a written request
therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are
defined in the Rights Agreement), whether
currently held by or on behalf of such
Person or by any subsequent holder, may
become null and void.
With respect to such certificates containing the
foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by
such certificates shall be evidenced by such
certificates alone and registered holders of Common
Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by
such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the
forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or
designation and such legends, summaries or
endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and
on their face shall entitle the holders thereof to
purchase such number of one one-hundredths of a share
of Preferred Stock as shall be set forth therein at
the price set forth therein (such exercise price per
one one-hundredth of a share, the "Purchase Price"),
but the amount and type of securities purchasable upon
the exercise of each Right ande Purchase Price thereof
shall be subject to adjustments provided herein.
(b) Any Right Certificate issued
pursuant to Section 3(a), Section 11(i) or Section 22
hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan,
arrangement or understanding which has as a primary
purpose or effect avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section
6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned
by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined
in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights
represented hereby may become null and void
in the circumstances specified in Section
7(e) of the Rights Agreement.
Section 5. Countersignature and
Registration.
(a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of
the Board, its President or any Vice President, either
manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or
by facsimile signature. The Rights Certificates shall
be countersigned by the Rights Agent, either manually
or by facsimile signature, and shall not be valid for
any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and
delivered by the Company with the same force and
effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the
Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual
date of the execution of such Rights Certificate,
shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was
not such an officer.
(b) Following the Distribution Date,
the Rights Agent will keep, or cause to be kept, at
its principal office or offices designated as the
appropriate place for surrender of Rights Certificates
upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder.
Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split-Up, Combination
and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of
Section 4(b), Section 7(e) and Section 14 hereof, at
any time after the close of business on the
Distribution Date, and at or prior to the close of
business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split
up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered
holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash
or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitles
such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate
contained in the form of assignment on the reverse
side of such Rights Certificate and shall have
provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in
connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and
the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase
Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, at
any time after the Distribution Date the registered
holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided
herein including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in
part upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate
on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with
respect to the total number of one one-hundredths of a
share (or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earlier of
(i) 5:00 P.M., New York City time, on August 5, 2007,
or such later date as may be established by the Board
of Directors prior to the expiration of the Rights
(such date, as it may be extended by the Board, the
("Final Expiration Date"), or (ii) the time at which
the Rights are redeemed as provided in Section 23
hereof (the earlier of (i) and (ii) being herein
referred to as the "Expiration Date").
(b) The Purchase Price for each one
one-hundredth of a share of Preferred Stock pursuant
to the exercise of a Right shall initially be $150.00,
and shall be subject to adjustment from time to time
as provided in Section 11 and Section 13(a) hereof and
shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights
Certificate representing exercisable Rights, with the
form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price per one one-
hundredth of a share of Preferred Stock (or other
shares, securities, cash or other assets, as the case
may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the
Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or
make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total
number of one one-hundredths of a share of Preferred
Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing
such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to
or, upon the order of the registered holder of such
Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by
certified bank check or bank draft payable to the
order of the Company. In the event that the Company
is obligated to issue other securities (including
Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or
other property are available for distribution by the
Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of
Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock would be issued.
(d) In case the registered holder of
any Rights Certificate shall exercise less than all
the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such
name or names as may be designated by such holder,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this
Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan,
arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action
and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or any
other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this
Agreement to the contrary, neither the Rights Agent
nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in
this Section 7 unless such registered holder shall
have (i) completed and signed the certificate
contained in the form of election to purchase set
forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates
surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if
surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates
to the Company, or shall, at the written request of
the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of
Capital Stock.
(a) The Company covenants and agrees
that it will cause to be reserved and kept available
out of its authorized and unissued shares of Preferred
Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury),
the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred
Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the
Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such
exercise.
(c) The Company shall use its best
efforts to (i) file, as soon as practicable following
the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section
11(a)(iii) hereof, a registration statement under the
Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective
as soon as practicable after such filing, and (iii)
cause such registration statement to remain effective
(with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable
for such securities, and (B) the date of the
expiration of the Rights. The Company will also take
such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of
the various states in connection with the
exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare
and file such registration statement and permit it to
become effective. Upon any such suspension, the
Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such
time as the suspension has been rescinded. In
addition, if the Company shall determine that a
registration statement is required following the
Distribution Date, the Company may temporarily suspend
the exercisability of the Rights until such time as a
registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under
applicable law, or a registration statement shall not
have been declared effective.
(d) The Company covenants and agrees
that it will take all such action as may be necessary
to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and
agrees that it will pay when due and payable any and
all Federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery
of the Rights Certificates and of any certificates for
a number of one one-hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other
than, or the issuance or delivery of a number of one
one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may
be) in respect of a name other than that of the
registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue
or deliver any certificates for a number of one one-
hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in
a name other than that of the registered holder upon
the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or
until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date.
Each person in whose name any certificate for a number
of one one-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case
may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock
(or Common Stock and/or other securities, as the case
may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided,
however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such
Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on,
and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock
(or Common Stock and/or other securities, as the case
may be) transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled
to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be
exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number of Rights. The
Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event the Company
shall at any time after the date of this
Agreement (A) declare a dividend on the
Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller
number of shares, or (D) issue any shares of
its capital stock in a reclassification of
the Preferred Stock (including any such
reclassification in connection with a
consolidation or merger in which the Company
is the continuing or surviving corporation),
except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase
Price in effect at the time of the record
date for such dividend or of the effective
date of such subdivision, combination or
reclassification, and the number and kind of
shares of Preferred Stock or capital stock,
as the case may be, issuable on such date,
shall be proportionately adjusted so that
the holder of any Right exercised after such
time shall be entitled to receive, upon
payment of the Purchase Price then in
effect, the aggregate number and kind of
shares of Preferred Stock or capital stock,
as the case may be, which, if such Right had
been exercised immediately prior to such
date and at a time when the Preferred Stock
transfer books of the Company were open,
such holder would have owned upon such
exercise and been entitled to receive by
virtue of such dividend, subdivision,
combination or reclassification. If an
event occurs which would require an
adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior
to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event any Person
shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring
Person, unless the event causing such Person
to become an Acquiring Person is a
transaction set forth in Section 13(a)
hereof, or is an acquisition of shares of
Common Stock pursuant to a tender offer or
an exchange offer for all outstanding shares
of Common Stock at a price and on terms
determined by at least a majority of the
members of the Board of Directors who are
not officers of the Company and who are not
representatives, nominees, Affiliates or
Associates of an Acquiring Person, after
receiving advice from one or more investment
banking firms, to be (a) at a price which is
fair to stockholders and not inadequate
(taking into account all factors which such
members of the Board deem relevant,
including, without limitation, prices which
could reasonably be achieved if the Company
or its assets were sold on an orderly basis
designed to realize maximum value) and (b)
otherwise in the best interests of the
Company and its stockholders (a "Qualified
Offer")
then, promptly following the occurrence of such event,
proper provision shall be made so that each holder of
a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement,
in lieu of a number of one one-hundredths of a share
of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths of a
share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by
50% of the Current Market Price (determined pursuant
to Section 11(d) hereof) per share of Common Stock on
the date of such first occurrence (such number of
shares, the "Adjustment Shares").
(iii) In the event that the number of
shares of Common Stock which are authorized by the
Company's Restated Certificate of Incorporation, but
which are not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights, are
not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph
(ii) of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value"),
and (B) with respect to each Right (subject to Section
7(e) hereof), make adequate provision to substitute
for the Adjustment Shares, upon the exercise of a
Right and payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of
shares, of preferred stock, such as the Preferred
Stock, which the Board has deemed to have essentially
the same value or economic rights as shares of Common
Stock (such shares of preferred stock being referred
to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6)
any combination of the foregoing, having an aggregate
value equal to the Current Value (less the amount of
any reduction in the Purchase Price), where such
aggregate value has been determined by the Board based
upon the advice of a nationally recognized investment
banking firm selected by the Board; provided, however,
that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event
and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to
the Spread. For purposes of the preceding sentence,
the term "Spread" shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the
Board determines in good faith that it is likely that
sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder
approval for the authorization of such additional
shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period").
To the extent that action is to be taken pursuant to
the first and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (2) may
suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek
such shareholder approval for such authorization of
additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue
a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well
as a public announcement at such time as the
suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of each Adjustment
Share shall be the current market price per share of
the Common Stock on the Section 11(a)(ii) Trigger Date
and the per share or per unit value of any Common
Stock Equivalent shall be deemed to equal the current
market price per share of the Common Stock on such
date.
(b) In case the Company shall fix a
record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after
such record date) Preferred Stock (or shares having
the same rights, privileges and preferences as the
shares of Preferred Stock ("Equivalent Preferred
Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per
share of Preferred Stock or per share of Equivalent
Preferred Stock (or having a conversion price per
share, if a security convertible into Preferred Stock
or Equivalent Preferred Stock) less than the Current
Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock
and/or Equivalent Preferred Stock so to be offered
(and/or the aggregate initial conversion price of the
convertible securities so to be offered) would
purchase at such Current Market Price, and the
denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock
and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be
paid by delivery of consideration, part or all of
which may be in a form other than cash, the value of
such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of
the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment
shall be made successively whenever such a record date
is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a
record date for a distribution to all holders of
Preferred Stock (including any such distribution made
in connection with a consolidation or merger in which
the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than
a dividend payable in Preferred Stock, but including
any dividend payable in stock other than Preferred
Stock) or evidences of indebtedness, or of
subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction,
the numerator of which shall be the Current Market
Price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, less
the fair market value (as determined in good faith by
the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent) of the portion of the cash,
assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock, and the
denominator of which shall be such Current Market
Price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock. Such adjustments shall
be made successively whenever such a record date is
fixed, and in the event that such distribution is not
so made, the Purchase Price shall be adjusted to be
the Purchase Price which would have been in effect if
such record date had not been fixed.
(d)(i) For the purpose of any
computation hereunder, other than computations made
pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share of Common Stock on any date
shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty
(30) consecutive Trading Days immediately prior to
such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share of Common Stock on any date
shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such
date; provided, however, that in the event that the
Current Market Price per share of the Common Stock is
determined during a period following the announcement
by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares
of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-
dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day
or ten (10) Trading Day period, as set forth above,
then, and in each such case, the Current Market Price
shall be properly adjusted to take into account ex-
dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to
securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of Common Stock
are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect
to securities listed on the principal national
securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter
market, as reported by the National Association of
Securities Dealers Automated Quotation System
("NASDAQ") or such other system then in use, or, if on
any such date the shares of Common Stock are not
quoted by any such organization, the average of the
closing bid and asked prices as furnished by a
professional market maker making a market in the
Common Stock selected by the Board. If on any such
date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as
determined in good faith by the Board shall be used.
The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the
shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if
the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly
held or not so listed or traded, Current Market Price
per share shall mean the fair value per share as
determined in good faith by the Board, whose
determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any
computation hereunder, the Current Market
Price per share of Preferred Stock shall be
determined in the same manner as set forth
above for the Common Stock in clause (i) of
this Section 11(d) (other than the last
sentence thereof). If the Current Market
Price per share of Preferred Stock cannot be
determined in the manner provided above or
if the Preferred Stock is not publicly held
or listed or traded in a manner described in
clause (i) of this Section 11(d), the
Current Market Price per share of Preferred
Stock shall be conclusively deemed to be an
amount equal to 100 (as such number may be
appropriately adjusted for such events as
stock splits, stock dividends and
recapitalizations with respect to the Common
Stock occurring after the date of this
Agreement) multiplied by the Current Market
Price per share of the Common Stock. If
neither the Common Stock nor the Preferred
Stock is publicly held or so listed or
traded, Current Market Price per share of
the Preferred Stock shall mean the fair
value per share as determined in good faith
by the Board, whose determination shall be
described in a statement filed with the
Rights Agent and shall be conclusive for all
purposes. For all purposes of this
Agreement, the Current Market Price of a
unit of one-one hundredth of a share of
Preferred Stock shall be equal to the
Current Market Price of one share of
Preferred Stock divided by 100.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%)
in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a
share of Common Stock or other share or one-millionth
of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment
made pursuant to Section 11(a)(ii) or Section 13(a)
hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital
stock other than Preferred Stock, thereafter the
number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as
practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c),
(e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by
the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have
exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c),
each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right
to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a share of Preferred
Stock (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-
hundredths of a share covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after
the date of any adjustment of the Purchase Price to
adjust the number of Rights, in lieu of any adjustment
in the number of one one-hundredths of a share of
Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be
exercisable for the number of one one-hundredths of a
share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of
the number of Rights shall become that number of
Rights (calculated to the nearest one-ten-thousandth)
obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust
the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount
of the adjustment to be made. This record date may be
the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten (10) days
later than the date of the public announcement. If
Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of
record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be
distributed to such holders of record in substitution
and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of
Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or
change in the Purchase Price or the number of one one-
hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to
express the Purchase Price per one one-hundredth of a
share and the number of one one-hundredth of a share
which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that
would cause an adjustment reducing the Purchase Price
below the then stated value, if any, of the number of
one one-hundredths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and
nonassessable such number of one one-hundredths of a
share of Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section
11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a
specified event, the Company may elect to defer until
the occurrence of such event the issuance to the
holder of any Right exercised after such record date
the number of one one-hundredths of a share of
Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise
over and above the number of one one-hundredths of a
share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that
in their good faith judgment the Board of Directors of
the Company shall determine to be advisable in order
that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current
Market Price, (iii) issuance wholly for cash of shares
of Preferred Stock or securities which by their terms
are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders
of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees
that it shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with
Section 11(o) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions,
assets, cash flow or earning power aggregating more
than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such
consolidation, merger or sale there are any rights,
warrants or other instruments or securities
outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders
of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a)
hereof shall have received a distribution of Rights
previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees
that, after the Distribution Date, it will not, except
as permitted by Section 23 or Section 26 hereof, take
(or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably
foreseeable that such action will diminish
substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the
contrary notwithstanding, in the event that the
Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Rights
associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock
following any such event shall equal the result
obtained by multiplying the number of Rights
associated with each share of Common Stock immediately
prior to such event by a fraction the numerator which
shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total
number of shares of Common Stock outstanding
immediately following the occurrence of such event.
Section 12. Certificate of Adjusted
Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent,
and with each transfer agent for the Preferred Stock
and the Common Stock, a copy of such certificate and
(c) if a Distribution Date has occurred, mail a brief
summary thereof to each holder of a Rights Certificate
in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale
or Transfer of Assets, Cash Flow or Earning Power.
(a) In the event that, following the
Stock Acquisition Date, directly or indirectly, (x)
the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section
11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the
Company shall be the continuing or surviving
corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or
part of the outstanding shares of Common Stock shall
be changed into or exchanged for stock or other
securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one transaction or a
series of related transactions, assets, cash flow or
earning power aggregating more than 50% of the assets,
cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of
the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each
such case (except as may be contemplated by Section
13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right
to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and
issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to
the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-
hundredths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the
number of such one one-hundredths of a share for which
a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2)
50% of the Current Market Price (determined pursuant
to Section 11(d)(i) hereof) per share of the Common
Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all
the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in
connection with the consummation of any such
transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares
of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean:
(i) in the case of any
transaction described in clause (x) or (y)
of the first sentence of Section 13(a), the
Person that is the issuer of any securities
into which shares of Common Stock of the
Company are converted in such merger or
consolidation, and if no securities are so
issued, the Person that is the other party
to such merger or consolidation; and
(ii) in the case of any
transaction described in clause (z) of the
first sentence of Section 13(a), the Person
that is the party receiving the greatest
portion of the assets, cash flow or earning
power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the
Common Stock of such Person is not at such time and
has not been continuously over the preceding twelve
(12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall
refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more
of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate
any such consolidation, merger, sale or transfer
unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to
permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set
forth in paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after
the date of any consolidation, merger or sale of
assets mentioned in paragraph (a) of this Section 13,
the Principal Party will
(i) prepare and file a
registration statement under the Act, with
respect to the Rights and the securities
purchasable upon exercise of the Rights on
an appropriate form, and will use its best
efforts to cause such registration statement
to (A) become effective as soon as
practicable after such filing and (B) remain
effective (with a prospectus at all times
meeting the requirements of the Act) until
the Expiration Date; and
(ii) take such all such
other action as may be necessary to enable
the Principal Party to issue the securities
purchasable upon exercise of the Rights,
including but not limited to the
registration or qualification of such
securities under all requisite securities
laws of jurisdictions of the various states
and the listing of such securities on such
exchanges and trading markets as may be
necessary or appropriate; and
(iii) will deliver to
holders of the Rights historical financial
statements for the Principal Party and each
of its Affiliates which comply in all
respects with the requirements for
registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales
or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of
a Section 11(a)(ii) Event, the Rights which have not
theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction
is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common
Stock which is a Qualified Offer as such term is
defined in Section 11(a)(ii) hereof (or a wholly owned
subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such
transaction is not less than the price per share of
Common Stock paid to all holders of shares of Common
Stock whose shares were purchased pursuant to such
tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders
of shares of Common Stock pursuant to such transaction
is the same as the form of consideration paid pursuant
to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and
Fractional Shares.
(a) The Company shall not be required
to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof,
or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights,
the Company shall pay to the registered holders of the
Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes
of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to
securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction
reporting system with respect to securities listed on
the principal national securities exchange on which
the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted
price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the
closing bid and asked prices as furnished by a
professional market maker making a market in the
Rights, selected by the Board of Directors of the
Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required
to issue fractions of shares of Preferred Stock (other
than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates
which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock). In
lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share
of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current
market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b),
the current market value of one one-hundredth of a
share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for
the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a
Triggering Event, the Company shall not be required to
issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates
which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company
may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c),
the current market value of one share of Common Stock
shall be the closing price of one share of Common
Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the
date of such exercise.
(d) The holder of a Right by the
acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares
upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights
of action in respect of this Agreement are vested in
the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in
his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or
proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the
Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and
injunctive relief against actual or threatened
violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents
and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date,
the Rights will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the
Rights Certificates are transferable only on the
registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully
executed;
(c) subject to Section 6(a) and
Section 7(f) hereof, the Company and the Rights Agent
may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated
Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice
to the contrary; and
(d) notwithstanding anything in this
Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability
to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction
or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must
use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No holder, as such, of any
Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of
the number of one one-hundredths of a share of
Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24
hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other
disbursements incurred in the administration and
execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in
connection with the acceptance and administration of
this Agreement, including the costs and expenses of
defending against any claim of liability in the
premises.
(b) The Rights Agent shall be
protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it
in connection with its administration of this
Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities
of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine
and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or
Persons.
Section 19. Merger or Consolidation or
Change of Name of Rights Agent.
(a) Any corporation into which the
Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation
to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding
to the corporate trust, stock transfer or other
shareholder services business of the Rights Agent or
any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on
the part of any of the parties hereto; but only if
such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature
of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have
been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the
name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such
Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
(b) In case at any time the name of
the Rights Agent shall be changed and at such time any
of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and
deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its
prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The
Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the
holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with
legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be
full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it
in good faith and in accordance with such opinion.
(b) Whenever in the performance of its
duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any
Acquiring Person and the determination of Current
Market Price) be proved or established by the Company
prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be
liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same
(except as to its countersignature on such Rights
Certificates), but all such statements and recitals
are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be
under any responsibility in respect of the validity of
this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any
Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor
shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13
hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the
existence of facts that would require any such
adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will
perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all
such further and other acts, instruments and
assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby
authorized and directed to accept instructions with
respect to the performance of its duties hereunder
from the Chairman of the Board, the President, any
Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered
to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any
stockholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and
exercise any of the rights or powers hereby vested in
it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was
exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement
shall require the Rights Agent to expend or risk its
own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or
in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of
such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights
Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as
the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or
transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The
Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified
mail, and, if such resignation occurs after the
Distribution Date, to the registered holders of the
Rights Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights
Agent upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified
mail, and, if such removal occurs after the
Distribution Date, to the holders of the Rights
Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of
thirty (30) days after giving notice of such removal
or after it has been notified in writing of such
resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice,
submit his Rights Certificate for inspection by the
Company), then any registered holder of any Rights
Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a legal
business entity organized and doing business under the
laws of the United States or of the State of New York
or of any other state of the United States, in good
standing, having an office in the State of New York,
which is authorized under such laws to exercise
corporate trust or stock transfer or shareholder
services powers and which has at the time of its
appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of
a legal business entity described in clause (a) of
this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute
and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company
shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and, if such
appointment occurs after the Distribution Date, mail a
notice thereof in writing to the registered holders of
the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any
defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Rights
Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be
approved by the Board of Directors to reflect any
adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities
or property purchasable under the Rights Certificates
made in accordance with the provisions of this
Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock following
the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise,
conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in
connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be
issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create
a significant risk of material adverse tax
consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the
Company may, at its option, at any time prior to the
earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the
Record Date, the close of business on the tenth day
following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of
$0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to
as the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder
has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock
(based on the Current Market Price, as defined in
Section 11(d)(i) hereof, of the Common Stock at the
time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the
Board of Directors of the Company ordering the
redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any
further action and without any notice, the right to
exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights
by mailing such notice to all such holders at each
holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price
will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose,
at any time after the Distribution Date, (i) to pay
any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other
than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer
to the holders of Preferred Stock rights or warrants
to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (iii) to
effect any reclassification of its Preferred Stock
(other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or
with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section
11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one transaction
or a series of related transactions, of more than 50%
of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), or
(v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the
Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the
purposes of such stock dividend, distribution of
rights or warrants, or the date on which such
reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is
to take place and the date of participation therein by
the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in
the case of any such other action, at least twenty
(20) days prior to the date of the taking of such
proposed action or the date of participation therein
by the holders of the shares of Preferred Stock
whichever shall be the earlier.
(b) In case any of the events set
forth in Section 11(a)(ii) hereof shall occur, then,
in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of the occurrence of
such event, which shall specify the event and the
consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in
the preceding paragraph to Preferred Stock shall be
deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 25. Notices. Notices or demands
authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in
writing by the Rights Agent with the Company) as
follows:
Autoliv, Inc.
Xxx 000 00
X-000 00 Xxxxxxxxx
Xxxxxx
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or
made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another
address is filed in writing by the Rights Agent with
the Company) as follows:
First Chicago Trust Company
of New York
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Tenders/Exchanges Administration
Notices or demands authorized by this
Agreement to be given or made by the Company or the
Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock)
shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements and Amendments.
Prior to the Distribution Date, and subject to the
penultimate sentence of this Section 27, the Company
and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement
without the approval of any holders of certificates
representing shares of Common Stock. From and after
the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person); provided, this Agreement may
not be supplemented or amended to lengthen any time
period hereunder, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate
officer of the Company which states that the proposed
supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests
of the holders of Common Stock. Notwithstanding
anything herein to the contrary, this Agreement may
not be amended at a time when the Rights are not
redeemable.
Section 27. Successors. All the covenants
and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and
inure to the benefit of their respective successors
and assigns hereunder.
Section 28. Determinations and Actions by
the Board of Directors, etc. For all purposes of this
Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time,
including for purposes of determining the particular
percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the
Company shall have the exclusive power and authority
to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or
to the Company, or as may be necessary or advisable in
the administration of this Agreement, including,
without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii)
make all determinations deemed necessary or advisable
for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for
purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other
parties, and (y) not subject the Board or any of the
directors on the Board to any liability to the holders
of the Rights.
Section 29. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give
to any Person other than the Company, the Rights Agent
and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered
holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common
Stock).
Section 30. Severability. If any term,
provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith
judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect
of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day
following the date of such determination by the Board
of Directors. Without limiting the foregoing, if any
provision requiring a specific group of Directors of
the Company to act is held to by any court of
competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination
shall then be made by the Board of Directors of the
Company in accordance with applicable law and the
Company's Restated Certificate of Incorporation and
By-laws.
Section 31. Governing Law. This Agreement,
each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with
the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 32. Counterparts. This Agreement
may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings.
Descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed, all as of
the day and year first above written.
AUTOLIV, INC.
By:/s/ Gunnar Bark
Name: Gunnar Bark
Title: Chairman and CEO
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By:/s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . 2
Section 2. Appointment of Rights Agent . . . . 11
Section 3. Issuance of Rights Certificates . . 11
Section 4. Form of Rights Certificates . . . . 15
Section 5. Countersignature and Registration . 17
Section 6. Transfer, Split-Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . 19
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . 21
Section 8. Cancellation and Destruction of
Rights Certificates . . . . . . . . 26
Section 9. Reservation and Availability of
Capital Stock . . . . . . . . . . . 27
Section 10. Preferred Stock Record Date . . . . 31
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of
Rights . . . . . . . . . . . . . . . 32
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares . . . . . 54
Section 13. Consolidation, Merger or Sale or
Transfer of Assets, Cash Flow or
Earning Power . . . . . . . . . . . 55
Section 14. Fractional Rights and Fractional
Shares . . . . . . . . . . . . . . . 62
Section 15. Rights of Action . . . . . . . . . . 65
Section 16. Agreement of Rights Holders . . . . 66
Section 17. Rights Certificate Holder Not Deemed
a Stockholder . . . . . . . . . . . 68
Section 18. Concerning the Rights Agent . . . . 69
Section 19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . 70
Section 20. Duties of Rights Agent . . . . . . . 71
Section 21. Change of Rights Agent . . . . . . . 76
Section 22. Issuance of New Rights Certificates 78
Section 23. Redemption and Termination . . . . . 80
Section 24. Notice of Certain Events . . . . . . 82
Section 25. Notices . . . . . . . . . . . . . . 84
Section 26. Supplements and Amendments . . . . . 85
Section 27. Successors . . . . . . . . . . . . . 87
Section 28. Determinations and Actions by the
Board of Directors, etc . . . . . . 87
Section 29. Benefits of this Agreement . . . . . 88
Section 30. Severability . . . . . . . . . . . . 88
Section 31. Governing Law . . . . . . . . . . . 89
Section 32. Counterparts . . . . . . . . . . . . 90
Section 33. Descriptive Headings . . . . . . . . 90
EXHIBITS
Exhibit A -- Form of Certificate of
Designation, Preferences and
Rights
Exhibit B -- Form of Rights Certificates
Exhibit C -- Form of Summary of Rights
AUTOLIV, INC.
and
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
as Rights Agent
----------------
Rights Agreement
Dated as of December 4, 1997
